I recently was listening to a podcast of the Frank Peters show focusing on Angel Investing. The guest on his show, Permjot Valia, is an early stage investor. He has an interesting perspective on the start-up and Angel investing worlds.
He had a very interesting philosophy with regards to what financial metrics are most important in a start-up. Often entrepreneurs manage their entire business around the profit and loss statement. Permjot recommends managing from a cash flow perspective.
Here's his philosophy in summary:
- Focusing on Revenue = Insanity
- Focusing on Profit = Sanity
- Focusing on Cash Flow = Reality
Here's a good article from Entreprenuer that started with this question...
Q: Can you give me some tips on managing the cash flow of my new business?
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